Just last month, more banks were added to the OVDP FAQ 7.2 Penalty list and now, two more big names have been added: Rothschild Bank & Banca Credinvest.
What does it mean if your bank is on the FAQ 7.2 list? Can you file a Streamlined OVDP if your bank is listed on FAQ 7.2? Can you still opt-out?
We've written before about what your options are if your bank is listed on the FAQ 7.2 Foreign Financial Institutions or Facilitators list, but quickly:
- Yes — you can file a Streamlined OVDP. But only if you were non-willful and you are confident you will not be criminally charged.
- Yes — you can Opt-out, but it may be a bit tougher.
- But for many, entering into the Standard OVDP and agreeing to what is essentially one willful FBAR penalty may be a prudent, if not horribly comfortable choice.
The important thing to remember is that the Swiss banks who may have encouraged you to unwillingly break the law have decided to look after themselves first. Many times when we have filed a pre-clearance, we have received calls back from a US Prosecutor telling us our client is currently under investigation, and we have been able to act quick enough to stop the investigation going any further. The difference between taking immediate action and hesitating can be quite meaningful. If you need assistance getting into a disclosure program, contact us for help. Call us at 888-727-8796 or email email@example.com.
The Entire Foreign Financial Institutions or Facilitators/OVDP FAQ 7.2 50% penalty list as of June 4, 2015:
From the Department of Justice Press Release on June 3rd, 2015:
Rothschild Bank AG (Rothschild) was founded in 1968 and is headquartered in Zurich, Switzerland. Rothschild offered services that it knew could and did assist U.S. taxpayers in concealing assets and income from the Internal Revenue Service (IRS), including code-named accounts, numbered accounts and hold mail service, where Rothschild would hold all mail correspondence for a particular client at the bank. These services allowed certain U.S. taxpayers to minimize the paper trail associated with the undeclared assets and income they held at Rothschild in Switzerland. For a number of years, including after Swiss bank UBS AG announced in 2008 that it was under criminal investigation, and following instructions from certain U.S. taxpayers, Rothschild serviced certain U.S. customers without disclosing their identities to the IRS.
Some of Rothschild’s U.S. clients had accounts that were nominally structured in the names of non-U.S. entities. In some such cases, Rothschild knew that a U.S. client was the true beneficial owner of the account but nonetheless obtained a form or document that falsely declared that the beneficial owner was not a U.S. taxpayer. Since Aug. 1, 2008, Rothschild had 66 U.S.-related accounts held by entities created in Panama, Liechtenstein, the British Virgin Islands, the Cayman Islands or other foreign countries with U.S. beneficial owners. At least 21 of these accounts had false IRS Forms W-8BEN in the file, which are used to identify the beneficial owner of an account.
Rothschild knew it was highly probable that such U.S. clients were engaging in this scheme to avoid U.S. taxes but permitted these accounts to trade in U.S. securities without reporting account earnings or transmitting any withholding taxes to the IRS, as Rothschild was required to do. Rothschild also opened accounts for U.S. taxpayers who had left other Swiss banks that the Department of Justice was investigating, including UBS. Since Aug. 1, 2008, Rothschild had 332 U.S.-related accounts with an aggregate maximum balance of approximately $1.5 billion. Of these 332 accounts, 191 accounts had U.S. beneficial owners and an aggregate maximum balance of approximately $836 million. Rothschild will pay a penalty of $11.51 million.
Located in Lugano, Switzerland, Banca Credinvest SA (Credinvest) started operations as a fully licensed bank in 2005. Credinvest offered a variety of services that it knew could assist, and that did assist, U.S. clients in concealing assets and income from the IRS, including hold mail service and numbered accounts. Credinvest did not set up any formalized internal reporting regarding U.S. clients and did not adopt any procedures to ascertain or monitor the compliance of its U.S. clients with their U.S. tax obligations. In late 2008, an external asset manager referred 11 accounts to Credinvest, all of which were for U.S. clients who had left UBS.
The bank delegated to that external asset manager the primary management of those accounts and failed to ascertain the compliance of those clients with their U.S. tax obligations. The bank thus aided and assisted those clients in concealing their accounts from U.S. authorities. Since Aug. 1, 2008, Credinvest had 31 U.S.-related accounts with just over $24 million in assets. Credinvest will pay a penalty of $3.022 million.